If you’re facing a foreclosure in Washington, the process will likely be nonjudicial (out of court), although the bank could choose to use a more expensive judicial procedure by filing a lawsuit in state court. In most cases, if you go through a foreclosure in Washington, the process will be nonjudicial. (To learn when and why the bank might choose to foreclose through court instead, see Why Would a Lender Choose a Judicial Foreclosure Instead of a Nonjudicial Foreclosure?)
In this article, you’ll get information about how a typical nonjudicial foreclosure in Washington works, as well as learn about your legal rights under federal and state law, which might help you keep your home. (To learn what to do—and what not do—if you’re facing a foreclosure, see Foreclosure Do’s and Don’ts.)
Under federal law, homeowners get certain protections both before and during the foreclosure process. The servicer usually can’t start the foreclosure process until the homeowner is more than 120 days late on payments. (12 C.F.R. § 1024.41).
Also, the servicer has to give the homeowner information on ways to avoid foreclosure. Specifically, the servicer must attempt to contact the homeowner by phone no later than 36 days after the homeowner fails to make a payment—and in writing no later than 45 days after missing a payment—to discuss options that might resolve the problem. (12 C.F.R. § 1024.39). (To learn more about federal foreclosure laws, including those that protect homeowners after the foreclosure starts, see Federal Laws Protecting Homeowners: Foreclosure Protections.)
In Washington, most residential foreclosures are nonjudicial, which means the foreclosure happens without court supervision. Because most foreclosures in Washington take this route, the rest of this article focuses on those procedures.
Here’s how the process generally works:
In most cases, the foreclosing bank has to contact the borrower, or meet the requirements for attempting to contact the borrower, at least 30 days before issuing a notice of default. The purpose of the contact is to inform you about the opportunity to meet with the bank to try to work out a loss mitigation option (usually called the borrower’s right to “meet and confer”). If you respond to the initial contact, the bank can't issue a notice of default until 90 days after the initial contact with you was initiated. (Wash. Rev. Code § 61.24.031).
If you don’t respond to the letter or work out a way to avoid foreclosure, a notice of default is served on you 30 days before a notice of sale is recorded or served. The notice of default must be served by both first-class mail and by registered or certified mail, return receipt requested, and by either posting the notice on the premises in a prominent place or by personal service. (Wash. Rev. Code § 61.24.030).
Once the notice of default has been issued, the homeowner becomes eligible for mediation. Homeowners aren’t able to opt-in to the mediation program without a referral. To request mediation, you must contact a housing counselor or attorney who will provide a referral to the program, if appropriate for the situation. Mediation must be requested between the time you receive the notice of default and no later than twenty days after the notice of sale is recorded. (Wash. Rev. Code § 61.24.030, § 61.24.163).
If you aren’t referred to mediation within 30 days from receiving the notice of default, the trustee issues a notice of sale, records it, mails you a copy, and posts it on the property (or serves the home’s occupant a copy) at least 90 days, or 120 days (depending on the situation), before the sale date. The notice of sale must also be published in a newspaper. (Wash. Rev. Code §§ 61.24.040, 61.24.030).
Under state law, the bank can’t hold the sale less than 190 days after the date of default. (Wash. Rev. Code § 61.24.040).
The purchaser at the sale is entitled to possession of the property on the 20th day after the sale. (Wash. Rev. Code § 61.24.060).
Washington law provides you with the right to reinstate your loan at any time prior to the 11th day before the sale. (Wash. Rev. Code §§ 61.24.040, 61.24.090).
Some states have a law that allows a foreclosed homeowner to “redeem” (buy back) the home after the foreclosure sale. Washington law, however, doesn’t provide a post-sale redemption period after a nonjudicial foreclosure. (Wash. Rev. Code § 61.24.050). (If you think you will lose your home to foreclosure, read When Do You Have to Leave Your Home When It’s in Foreclosure?)
If the total mortgage debt is more than the foreclosure sale price, the difference is called a “deficiency.” Some states allow the lender to get a personal judgment (called a “deficiency judgment”) against the borrower for this amount.
Washington law doesn’t permit the bank to get a deficiency judgment after a nonjudicial foreclosure. (Wash. Rev. Code § 61.24.100). (For a summary of the deficiency law in Washington, see Deficiency Judgments After Foreclosure in Washington.)
You can find Washington’s foreclosure laws in §§ 61.24.020 to 61.24.163 of the Revised Code of Washington. (To learn how to look up foreclosure laws, see How to Find the Foreclosure Laws in Your State.)
If you think the foreclosing bank or servicer violated the law or you want to find out about different ways to fight a foreclosure, consider contacting a local foreclosure attorney. (To learn more about your right to challenge the foreclosure, see Your Rights in a Foreclosure.)